ASPIRE Scheme for Promoting Rural Area Entrepreneurship

ASPIRE Scheme for Promoting Rural Area Entrepreneurship

Updated on Jun 12, 2020

ASPIRE Scheme is also known as the promotion of innovation, entrepreneurship, and Agro-Industry that is promoted by the Ministry of Micro, Small and Medium Enterprises. This scheme was launched in the budget of 2014-15 by the Honorable Finance Minister. This scheme was started to establish Technology Centre Network to promote Innovation, Entrepreneurship as well as Agro-Industry. The Fund allocated for this scheme was Rs.200 crore. For incubation of new ideas and providing necessary support for accelerating entrepreneurship A nationwide "District level Incubation and Accelerator Programme" would be taken up. The ASPIRE Scheme was launched to promote innovation, Entrepreneurship, and agro-industry.

Overview

One of the prime concerns for the Government of India is the development of the rural economy. There are a lot of efforts that have been continuously made for improving the economic as well as social well-being of people who are living in rural areas on a sustainable basis. Despite the sincere efforts, there are a lot of problems like poverty, unemployment; drudgery migration still exists in the rural economy. We need to solve these problems by creating employment opportunities in rural areas. This can be done by setting up small enterprises in the Agro-based industry sector more so as almost 56 % of the populace is still reliant on agriculture. There is proper scope for innovation, value addition as well as entrepreneurship development in this sector. This can be made possible only by skill up-gradation, handholding, mentoring, incubation, and credit support that aim primarily at rural youth and women to provide them with employment opportunities in rural areas. The ASPIRE Scheme's main aim is to solve this problem and create more employment opportunities through entrepreneurship in rural areas.

The Objective

The main objectives of the ASPIRE scheme are mentioned below:

  • This scheme's main aim was to create new jobs and reduce unemployment in rural areas.
  • This scheme will also help to promote entrepreneurship culture in India.
  • Grassroots financial development at the district level in the country.
  • To make a smooth, innovative business solution for unmet social needs.
  • To promote innovation, this will help to strengthen the competitiveness of the MSME sector.

The Fund allocated for ASPIRE Scheme is Rs.200 crore that will be used for the following purposes:

  • Mechanization of agricultural practices and activities related.
  • Value addition to agriculture as well as forest produce.
  • Recycling of agricultural pre and post-harvest wastages, off-farm but farm linked animal husbandry, etc.
  • Production models for aggregation and value addition applicable to rural areas.
  • Business models for the formation of local employment in rural areas.
  • Business models for societal impact.

Utilization of Rs.200 Crore under ASPIRE Scheme 

The Rs.200 crore allocated for the ASPIRE Scheme will be used for the following purposes:

Rs.60 Crore- Fund of Funds Creation with SIDBI 

A Fund of Funds will be made under Small Industries Development Bank of India (SIDBI), and Rs.60 Crore has been allotted for the same. SIDBI by using inventive means of business like Equity, Quasi-Equity, Angel fund, Venture capital fund, Impact funds, Challenge funds, etc. that will have to enable ideas or innovation and change these into commercial enterprises. This Fund allocated under these purposes will mainly target those initiatives which need support and fostering to succeed in developing technology and business project shortly. Areas of focus for the Fund allocated with SIDBI will be forward-backwards linkage in the chain of developed, service delivery as well as accelerator help for agro-based industries.

Rs.16.00 Crore- Support and Setting up of Incubation Centers 

The incubation centres assistance will be provided in two types that are supporting existing incubation centres and the establishment of dedicated incubation centres in the area of Agro-based Industries. The plan has been made by the government of India to support 20 existing incubation centres [Rs.30 lakh x 20 Centers that will cost almost Rs. 6 Crore]. To set up the new incubation centres in the area of Agro-based manufacturing [INR 1 Crore x 10 Centers that will cost Rs.10 Crores].

Rs.13.50 Crore- Incubation of Ideas 

For the incubation of ideas at the inception stage, support will be provided. Each idea would be provided with the financial support of Rs.3 lakh for the incubation of ideas at the inception stage. This type of innovative as well as successful ideas that are ready for commercialization through increasing examples or proof of concept (POC) or test marketing or validation in the case where POC already exists will be provided by the incubator out of the Seed Capital rotating Fund. There are 450 ideas to be supported at the beginning stage with Rs. 3 lakh each [INR 3 lakh x 450 Ideas then the total cost will be INR 13.50 crores].

Rs.30 Crore- Creation of Business Enterprise out of Innovative Ideas 

Onetime support of Rs 1.00 crore will be offered to the eligible incubator as Seed assets. The incubator can invest as Debt or Equity funding that is up to 50% of the total project cost of INR 20 Lakh per establish whichever is less for setting up of the start-ups to nurture for commercialization of the innovative as well as successful ideas. The income is plow to the Seed Capital turning Fund. 150 such pioneering and successful ideas that are to be supported for business venture creation after successful incubation [Rs. 20 lakh x 150 start-ups then the total cost is Rs.30 Crore].

Rs.2 Crore- Accelerator Programme for Incubates 

To create successful business enterprises in the domain of agriculture and rural industrialization, the accessible accelerators would be providing one-stop holistic help. This will help incubators to create leapfrog to the next level by conducting regular workshops, mentoring help under this subcomponent. Rs. 2 Crore for Accelerators to hold minimum 10 workshops for incubates [10 workshops x 20 lakh per workshop then the total cost would be Rs. 2 Crores].

Rs.62.50 Crore- Livelihood Business Incubation (LBI) 

The main motive of this feature to provide a large amount is to set up business incubators to incubate, impart entrepreneurship, skill development training to youth. The main focus of these incubators is to create jobs at the local level, and this will also support reducing unemployment by creating a favourable ecosystem for industrial development in the country. There are almost 80 Livelihood Business incubators that have been planned with an investment of Rs.1 crore per incubator. This support will be provided in the case of the Government-owned Incubation Center. If in case of an incubation centre have the Public-Private Partnership Model, and then Rs.50 lakh investment per incubation centre will be provided.

Nature of Assistance

The government of India is planning to establish 80 Livelihood business incubators from the year 2014 to 2016 with the help of NSIC, KVIC, or Coir Board or any other Institution/agency of GOI/State Government. If in case the incubation centres to be set up under PPP mode by NSIC, KVIC or Coir Board or any other Institution/agency of GOI/State Government then one- time grant of 50% of the cost of Plant and Machinery other than the land and infrastructure or Rs.50.00 lakh, whichever is less to be provided. The total budget allocated for this plan is Rs.62.50 crore for 2014-2016.                  

Incubator Training Cost

The MSME ministry will offer the requirements that help in the training under the ASPIRE scheme. Extra information Regarding the Assistance is mentioned below:

  • 50% of the cost of establishing the incubation centre by SSC.
  • 30% for plants as well as machine installations.
  • 20% for training will be provided after the training.

Eligibility to Apply for ASPIRE Scheme

The technical and research institutes can implement the incubation and advertising of entrepreneurship ideas. They can also involve entrepreneurs that are in connection with the agricultural sector. The following mentioned list of eligible sectors and organization under this scheme;

  • Incubators
  • Livelihood business incubators (LBI)
  • Techno business incubators (TBI)
  • The associated schemes under MSME, NSIC, and KVIC along with private incubators.

How to Apply?

To apply for the ASPIRE Scheme, the applicants have to send an Application to Aspire Scheme Steering Committee of the Ministry of MSME. The Scheme Steering Committee will have the responsibility for overall policy, coordination, as well as management support. The Council will be headed by the Secretary, Ministry of MSME.

You will able to learn about the guidelines and other details on the official website.

Frequently Asked Questions

Q: Which ministry launched the ASPIRE Scheme?

The ASPIRE Scheme was launched by the Ministry of Micro, Small and Medium Enterprises.

Q: How much amount allocated for the scheme?

The amount of Rs 200 crore allocated for the scheme.

Q: Is any processing fee for evaluating the proposals under the ASPIRE Fund charged by SIDBI?

No, there is no processing fee for evaluating the proposals under the ASPIRE Fund charged by SIDBI.

Q: Is there any state or sector made focus area for the ASPIRE scheme.

Yes, the benefits of this scheme will be mainly for the companies which are rural and agro focused and not for those companies which are exclusively Information Technology enterprises.


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WRITTEN BY Varsha Verma

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